Abstract:

    Exports act as one of the technological learning mechanisms. Previous studies have identified the contribution of export to firms′ innovation and capability-upgrading. However, there is limited research on the relationship between export and various types of innovation, and the mechanisms and paths of export-led innovation are not effectively described and identified. From the perspective of the resource-based view, this paper uses the 11,852 firms selected from the Chinese Annual Census of Industrial Enterprises Database and the Chinese Patent Database during 1999-2013 to explore the relationship between export intensity and innovation structures. The contingency factors are also taken into account in this study. The results are as follows: 

     Firstly, the export intensity of firms negatively influences the ratio of exploratory innovation to exploitative innovation. The higher the firm′s export intensity is, the more the firm tends to engage in exploitative innovation rather than exploratory innovation. On the one hand, firms with obvious resource advantages are more motivated to make use of their resource advantages for exploitative innovation and lack the motivation for exploratory innovation. On the other hand, international markets are full of risks and uncertainties, exploitative innovation is relatively less risky, and firms with higher export intensity are more inclined to engage in exploitative innovation. 

      Secondly, this relationship is moderated by government subsidies, knowledge breadth, and knowledge depth. Government subsidies can somehow compensate for the negative effect of exports on the ratio of exploratory to exploitative innovations. The more resources a company receives from the government, the greater its incentive to conduct knowledge search and technology learning through international markets, and thus the greater the likelihood of engaging in exploratory innovation to improve product performance.

     Thirdly, knowledge breadth helps to mitigate the negative effect of exports on the ratio of exploratory to exploitative innovation. With the improvement of firm′s knowledge breadth, firms are involved in richer technology fields, and the more sensitive they are to technology in the international market, which provides important support for technology exploration. The wider the breadth of knowledge, the more objective a firm′s technology risk assessment will be, the stronger its ability to resist technology risks, and the more inclined to exploratory innovation. Moreover, the expansion of knowledge depth facilitates the negative effect of exports on the ratio of exploratory innovation and exploitative innovation. Firms with deep knowledge are more specialized in a particular technical field and have stronger core technological rigidity. As the export intensity increases, the stronger the core technology rigidity is for the technological protection of existing products, the more difficult it is to introduce new technologies, the barriers to exploratory innovation from foreign markets are elevated, and firms are more inclined to exploitative innovation.

      By identifying that the export intensity of a firm has a significant impact on its innovation structure, this study therefore deepens our understanding of export-led technological learning theory. The benefits derived from export activities, mainly consist of product blueprints from overseas customers and user feedback from international markets. They are beneficial for firms to make continuous improvements to existing products and processes but do not contribute much to exploratory innovation characterized by leaps and bounds. Export activities and the related product improvements merely do not help firms escape the dilemma of technology "lock-in". 

     Meanwhile, this study has three important managerial implications for practice managers.

     In the first place, for sustaining the long-term competitive advantages, Chinese export firms need to pay attention to the balance of resources and attention. It is necessary for firms to input resources and energy into exploratory innovation, while their short-term performance may benefit from exploitative innovation derived from export activities. 

     Secondly, firms need to design export strategies in conjunction with the knowledge base. This study shows that the knowledge base within firms is an important factor affecting the effectiveness of export-led innovation. By expanding their knowledge-searching activities into neighboring areas, firms will gain advantages associated with exporting activities.

     Thirdly, government subsidies act as an important policy tool to influence firms′ export activities and innovation behaviors. It is well known that to continue their success on the track of export-led growth, much will depend on whether Chinese export firms overcome their disadvantages in design and R&D, etc. In this regard, this study highlights that government subsidies can compensate for the negative effect of exports on exploratory innovation, government subsidies illustrate the signal of a government′s will to innovate, facilitates firms to engage in more exploratory innovation and climb up the technological ladder.

Key words: export activity, exploratory innovation, exploitative innovation, government subsidy, knowledge breadth, knowledge depth